The back-to-front way of buying big things (on finance)

By | 23rd January 2017

The-backwards-way-to-buy-cars-and-houses

The first (wrong) question that usually comes up when considering some of the biggest purchases is:

What are you looking to spend?

However, the first question should be:

What are your requirements?

Many people can make the mistake of setting a budget first, before then seeing what they can spend that whole budget on.

In the case of finance, the maximum budget could be a multiple of the annual earnings – but you don’t have to use it all!

In many cases there are things well below your maximum that meet all your requirements, enabling you to save money towards other goals (perhaps FI) rather than spend it all on things that cost more but don’t provide much more in the way of useful additional benefits.

James McBrearty started his own business from scratch in 2006, to help the self-employed.

He helps people to escape from the corporate world and shares his thoughts here on the changing world of work, technology and personal finances; as well as the occasional travel post.

Over the next 10 years things are going to change significantly. James is a follower of frugality and minimalism; and an advocate of F.I.R.E. to minimise the coming disruption.

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